AUD: 3 reasons to be constructive – Goldman Sachs
Goldman Sachs' analysts offer their thoughts on Tuesday’s Reserve Bank of Australia (RBA) monetary policy decision while remaining constructive on the Aussie dollar.
Key Quotes:
“Australia's activity data have generally been on the disappointing side in recent weeks especially the collapse in the NAB Business Survey and accelerating declines in house prices.
As a result, despite some tentative evidence of firming inflation pressures, our economists flag that the RBA could drop its hiking bias in the minutes to (Tuesday's) meeting.
However, FX price action … is again a useful reminder that domestic activity is just one small part of what drives AUD, and we see three reasons to be constructive:
- Higher iron ore prices will support the terms of trade
- China-related risks seem to be moving in a more constructive direction
- We think the Fed's "patient" policy stance should support.”
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
